Dealer sentiment improves in December - Trade Only Today

Dealer sentiment improves in December

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December-Sentiment

Marine dealer sentiment improved in December from the previous month, but was lower than in the same month last year.

The MRAA/Baird/Trade Only Marine Retailer Sentiment Index rose to 76 from 70 in November, but was lower than the reading of 79 in December of 2016. The all-time high for the monthly index, which began in December of 2013, is 81.

The 3- to 5-year outlook decreased slightly, to 74, from 75 in November and from 82 in December of last year. Baird surveyed 87 dealers in December, a month that represents just 2 percent of annual sales.

“Our checks suggest marine trends remain positive, but winter months are seasonally less relevant,” Baird said. “Retailers appear encouraged by recently passed tax reform, which we expect to benefit most marine consumers — but are cautious on demand among affluent buyers in high-tax states. While marine demand remains well below prior peak, dealers (and investors) don't appear to expect a return to that level.”

Baird said dealers expect the tax reform law to help boost sales.

“Looking for a real good 2018,” one dealer said. “Credit to the Trump administration.”

Others were less optimistic.

There is an incredible quantity of inventory on dealer lots,” another dealer said. “This is not just in the marine industry, it is everything from boats to tractors. Optimism is high in the stock market, but yet to see it spill over into the higher-end retail.”

Baird said new-boat retail growth improved slightly in December. Forty-three percent of the dealers that were surveyed reported growth and only 29 percent reported a decline.

December--new-retail

Used-boat retail trends also showed modest improvement, Baird said, as 36 percent of dealers surveyed reported growth in December, compared with 31 percent in November and 21 percent in December last year.

December-used-retail

Dealers said new-boat inventory remained relatively balanced. In December 39 percent of those surveyed indicated that inventory was too high, compared with 21 percent that said it was too low.

“We believe inventory levels are within a ‘normal’ range, but acknowledge recent trends warrant monitoring,” Baird said.

Used-boat inventory stayed lean. Forty-eight percent of dealers said inventory was too low, compared with 18 percent that said it was too high.

“We continue to believe one of the key drivers of new-boat demand in the marine industry is the limited supply of late-model used boats,” Baird said.

Separately, dealers reported that social media and digital advertising represent significant portions of their marketing budget. Baird said two-thirds of the dealers reported that social/digital spending accounted for more than 25 percent of that budget.

december-social-media-spend

Twenty-nine percent of the dealers said 50 to 75 percent of their marketing budget is for social media; 31 percent of them said they spend 25 to 50 percent of the budget on it; and 33 percent of the dealers said they spend less than 25 percent of the budget that way.

Seven percent of dealers said they spend more than 75 percent of the marketing budget on social media.

Comments from dealers on social media and digital ad spending varied.

“It is where 75% of all my leads come from,” one dealer said, but, said another, “We have found it to be of little to no use for anything!”

Other upbeat remarks about social media and digital ad spending included these:

  • "Aside from shows and customer events, we are 100% digital;”
  • "We are seeing good returns on our spend on digital media;”
  • "Social Media and Google AdWords are pretty much our only form of advertising dollars spent other than boat shows, etc. Seems to work very well and the efficiency is excellent with the targeting so narrow.”

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